LogFAQs > #972752188

LinkPizza posted...

Its sound likes one person gets screwed. Either the houses cost the same amount for less land, meaning the buyer is spending the the same amount of money for less land overall, erring the builder more. Or the builder is getting screwed because the house are worth less because they have less land meaning they arent making more for more house, but doing more work for less money

It's exceedingly rare for the person building the house to also be the one selling it. More often, it's a developer who owns the land hiring a contractor to do the building. In that case, the builder gets paid the same amount to build the same house, then the developer sells the property for the price of the house plus the price of the land. Generally speaking, reducing the amount of lawn/driveway by 20% will reduce the sale price of the house, but by a lot less than 20% because home prices do not scale linearly by lot size. That means that when all those 20% reductions add up to one new lot every 5 properties, the developer sells 20% more homes. Even if those homes are sold for 85% of the price that would be charged for the full lot (which is a very generous estimate of the discount), selling 20% more means the developer is making 2% more money off of exactly the same amount of land, while creating more 20% construction jobs to build them all, providing 20% more homes, and making homes 15% more affordable for those looking to buy.

It's a win all around, provided that driveway isn't needed. If the driveway is needed, this is no longer an option, which is why I presented this as being something that a city can do when it's not designed so people need to own cars. Otherwise, it is indeed not a viable idea.